Mothilal rings turnaround at Telecom Fiji

Sri Lanka’s Mothilal De Silva as CEO has led Telecom Fiji Ltd. (TFL) to achieve a major turnaround in the financial year ended 31 March 2015 laying the platform for further growth.

TFL recently announced a net profit of $18.49 million for financial year 2014-15 ending 31 March 2015. This turnaround has been achieved after five consecutive years of financial losses. As previous year’s net loss was -$15 million, the turnaround is a $33.5 million. This financial turnaround was achieved through persistent initiatives addressing key business performance areas and due to prudent financial management. 

Mothilal took over at TFL last year and has over a decade of experience within the telecommunications and technologies industries. He is specialised in restructuring and rebounding troubled telecommunication companies. He was formerly the group strategy officer and group chief corporate officer of Dialog Axiata PLC, Sri Lanka, a quadruple play telecommunications company.

“Broadly, our strategies at TFL were focused on four different areas. First and foremost was cost rescaling or minimisation. This is one of our key strategies. On many fronts, we had reduced our costs in human resource, power, fleet management, annual maintenance and licence costs that had come through suppliers. We had tough negotiations with our suppliers,” Mothilal said.

“Another area was space; it’s very expensive in the Suva region so we reduced unutilised space with the reduction in human resource. We managed to reduce staff and that made them redundant. With the introduction of new technologies, you may also have to reduce staff,” he added.

During the past one year TFL’s EBITDA rose from 27% to 40%.  Share Holder Equity increased by 21% while Revenue per Employee increased by 39%. Growth forecast for the coming year too is promising.

In the business sector TFL recorded a growth of nearly 16% by providing tailor made corporate solutions to corporate and SME customers. In a segmented market TFL introduced multiple services to fulfil the demands of residential, corporate and SME customers. Connect Unify, Connect Infinity, Flight Information Display Service, Vuvale,  NoquViti, Box Office were some of the services introduced during the last year and most of these products were developed in house by young Fijian engineers.

In order to ensure enterprise wide concerted effort and goal congruence, tfl had implemented a robust performance management framework up to the employee level aligned to its overall strategic plan. Furthermore, an Enterprise Program Management Office has been established to ensure key strategic initiatives are implemented effectively and efficiently. 

TFL also has closely monitored its service delivery functions and performance which mainly concerns revenue realisation and customer satisfaction.

The company has been able to develop its service delivery matrix in the past year which reflected customer satisfaction ratings and revenue growth.

“Cost rescaling and resources rationalisation strategies have resulted in organisational restructuring and transformation. The improvements in business performance have been stimulated by more efficient utilisation of existing resources within the company,” De Silva added.

The second strategy TFL was focused on was revenue maximisation in a segmented market. The company strengthened its commercial activities to protect and enhance its revenues and market share.

De Silva noted: “The company recorded a growth of 3.25% or $2.85 million in its core operational revenue which was achieved through focused sales and marketing initiatives.”

The revenue growth was driven by 16% growth in the business customers who demand faster speeds and higher resiliency and availability of communications networks.

The third strategy TFL simultaneously focused on was the effective utilisation or monetisation of existing resources and investment rationalisation.

Organisational restructuring to increase efficiency by consolidating and streamlining business processes was the company’s fourth strategy.

TFL faces challenges from two fronts, one being the increasing use of voice services such as Skype and WhatsApp. People are going to increasingly use those services. Their international segment will be threatened and TFL is anticipating that in a small way that’s going to be a big challenge in the coming months and years.

De Silva stated going forward, Telecom Fiji will continue to enhance its infrastructure and services with an aim to meet customer demands and further improve its service delivery. 

“The company will continue to exercise prudency in its investment decisions in its endeavour for business growth and enhancing shareholder value,” he said.

Telecom Fiji is also working in closer collaboration with other subsidiaries within the ATH Group to leverage from existing resources within the group and with a view of minimising infrastructure duplications.

One of the on-going investments of Telecom Fiji is the upgrading of fibre optic cable network across the country. Once this is complete, the company will be able to provide faster internet speeds ranging from 10mbps to 50mbps.